Index Trends and Stocks In Action For 14th August 2013

The Indian equity markets yesterday closed at a one week high amid firm global cues, with interest rate-sensitive sectors leading the rally. The Nifty ended higher by 87 points at 5699. In our last write up we had mentioned that the Nifty has formed short-term bottom. We had particularly mentioned about the Bank Nifty having formed a good base and that the banking sector will lead the rally. This is exactly what we witnessed. Going ahead the market may face some resistance at 5730 and 5750 levels. If we sustain above this levels we could see the Nifty at 5800 in the coming trading sessions. On the downside 5650-5630 is a good support zone.

The board of Hotel Leelaventure has approved raising funds of up to Rs 1000 crore in one or more tranches through various instruments. The hospitality chain also said the board has given its nod for the issue of equity shares on preferential basis to a promoter group company to raise up to Rs 100 crore. The developments are likely to keep the stock in action for the days trades today.

Indian Oil Corporation will raise USD 500 million through a syndicated loan by the end of August. The proceeds will be used for working capital requirements. The market is likely to watch developments in this PSU closely and this could keep the stock in action in the near future.

Bajaj Auto, the country's second-largest motorcycle maker, said on Tuesday, the workers' union at its Chakan plant has called off a strike that started in end-June. Bajaj makes two-wheelers, including its high-end sports bikes at the Chakan plant, the annual capacity of which stood at 1.2 million vehicles as of March. The stock is likely to remain in action at least for some time following this development that happened yesterday.

According to the RBI Governor the CRR and SLR must come down going ahead. Subbarao earlier had disagreed that there is any need to cut these rates. Banking stocks have been hammered due to the recent short term liquidity tightening measures that the RBI undertook in the last month. These latest comments would be seen as a big positive by the markets and hence Banking stocks could remain in action over the shorter term.

According to the news sources, Heineken is looking to hike its stake in United Breweries. Heineken is looking to increase its presence in the emerging markets and hiking stake in United Breweries is a part of this. It will do so by buying the pledged shares but at the moment the lenders have refused to sell these shares. One can expect some movement in shares of United Breweries following this development.